1. Each Spring, the Foreign and Commonwealth Office
(FCO) produces a Departmental Report on its performance over the
previous 12 months. These Annual Reports also contain financial
and budgetary information, including projections of spending over
the conventional 5-year planning period.

2. Each year, this Committee conducts a short inquiry
into the latest FCO Annual Report[1]
and produces a Report of its own.[2]
This year's inquiry, carried out in the expectation that Parliament
will soon be dissolved, has been conducted within a somewhat shorter
timescale than we would have wished. Nonetheless, we have been
able not only to receive written evidence from the FCO in response
to specific questions we posed, and from others, but also to hear
oral evidence from Mr Mark Leonard,[3]
Viscount Weir[4]
and Professor Simon Reich,[5]
as well as from Sir John Kerr KCMG and senior officials from the
Foreign and Commonwealth Office.[6]

3. Last year, the scope of our evidence and Report[7]
included the Annual Report of British Trade International (BTI).
That part of our inquiry was conducted together with our colleagues
on the Trade and Industry Committee. In the short time available,
it has not been possible to hold a joint hearing this year and
we have therefore thought it best not to include BTI's Annual
Report[8]
in this inquiry. We leave any possible scrutiny of that Report
to our successors in the next Parliament.

Form and content of the Annual Report

4. Overall, we are pleased to note that there have
been improvements in the presentation of information in the Annual
Report and believe that our own Reports may have made some contribution
to those improvements. Of course, the usefulness of an Annual
Report may be enhanced or compromised by the quality of its contents
pages, cross-referencing and indexing. For example, the FCO Annual
Report 2001 does not list its 12 appendices on the contents page,
which means the reader must consult all of them in order to discover
what is the subject of each. And while we recognise that select
committee Reports have no index, where a document such as the
FCO Annual Report has an index it should at least be a useful
index.

5. The index to the Annual Report 2001 is not particularly
useful. It contains only two references to the United States,
neither of which includes the references on pages 40, 41 and 42
to inward investment in the United Kingdom by companies from the
United States. In the perhaps unlikely event that a reader is
seeking references to Greg Dyke or to The Gap, they can readily
be found. But the reader who is looking for those parts of the
Report which deal with entry clearance, peacekeeping or conflict
diamonds will search the index in vain. We recommend that greater
thought be given when preparing the FCO Departmental Report 2002
to making the index more comprehensive and more relevant to the
types of queries which readers are likely to have, and that the
title of each appendix is reproduced on the contents page.

6. The Annual Report contains an appendix listing
the 60 Measures for Change, which represent a series of commitments
entered into by the Foreign Secretary in 1998, presumably not
lightly.[9]
The list is included, as Sir John Kerr made clear, only because
this Committee requested that it should be. Our disappointment
that the Measures should have been consigned to an anonymous appendix
at the very end of the Annual Report was compounded by Sir John's
declaration that he would have preferred not to include them at
all, on the grounds that they are "an historical event now".[10]
Many of the Measures have indeed been achieved or superseded;
but about a third have not. We recommend that a list of those
19 of the 60 Measures for Change which, on the FCO's own reckoning,
have yet to be completed be retained in next year's Annual Report.

7. A chart on page 10 of the Annual Report presents
the organisational structure of the FCO in diagrammatic form.
The various FCO geographical, functional and administrative commands
are depicted as the sectors of a circle, at the centre of which
are shown the members of the Board of Management, each with their
respective titles listed. What is not clear from the chart, although
Sir John explained some of it in oral evidence,[11]
is the relationship between the members of the board and the commands.
We believe that this omission makes it difficult for the reader
to form an opinion on the extent to which the FCO's structure
assists or hampers it in meeting its objectives. We recommend
that in future editions of its Annual Report the FCO include a
description of how its organisational structure functions, how
the various components relate to each other, and of the responsibilities
of each member of the Board of Management.

Finance and asset management

RESOURCE-BASED ACCOUNTING AND BUDGETING

8. This year's Annual Report follows closely the
format of last year. As we have previously commented, it is particularly
helpful to have financial information in real terms, and we welcome
the inclusion in parts of the Report of such data alongside the
cash and resource-terms information. However, we do not find the
majority of the financial information easy to use or sufficiently
detailed. We would prefer to be able to see at a glance past and
projected expenditure for each of the commands, and for each major
post abroad. Such information would provide readers with an indication
of shifting and relative priorities. We recommend that the
FCO review how it presents financial information in its Annual
Report, with a view to making that information more accessible,
more detailed and more relevant to the concerns of those who are
likely to use the Report.

9. What is clear from the financial information in
the Annual Report is that whether measured in cash, real or resource
terms, core FCO expenditure[12]
has risen over the past year, for example in real terms from £866
million in 1999-2000 to £952 million in 2000-01.[13]
Much of this rise is due to increases in provision for peacekeeping
operations, which are up from £93 million to £133 million.
The FCO's projected expenditure (or "resource plans")
after 2001-2002 is expected to fall,[14]
although it is of course difficult to predict future spending
requirements on peacekeeping.

10. The shift to resource-based accounting and budgeting
produces effects more fundamental than those on the presentation
of information. As Mr Peter Collecott, Director of Resources,
said: "the incentives to look very carefully at what our
capital stock is and the degree to which not only the current
expenditure that we make but also the capital we are employing
are being employed effectively in pursuit of our objectivesthat
has got to be what it is aboutand therefore the degree
to which we have to look at selling some assets and buying other
assets. It also has positive incentives in terms of decisions
not so much for residences but more for offices and should we
rent or should we buy."[15]

THE FCO ESTATE

11. The process described by Mr Collecott was reflected
in the press release accompanying publication of the Annual Report
2001, in which the FCO placed some emphasis on the phrase "from
bricks to bytes".[16]
These words symbolise the claimed shift from the old diplomacy,
with grand properties in foreign capitals, to a newer, 'public'
diplomacy in which information technology and modern communications
systems play an increasingly important role.[17]
The implication is that as inappropriate embassy buildings are
sold off, funds are released for investment in new technology.

12. This Committee has enthusiastically supported
the FCO in its successful campaign to be granted independence
from Treasury rules on the payment of receipts from property sales
into the Consolidated Fund. We have welcomed the Treasury's decision
to allow the FCO to reinvest a significant proportion of these
receiptsan average of about £30 million per year is
being reinvested under this derogation.

13. However, it would not be correct to imply that
most of the funds thus liberated from Treasury control have been
spent on new technology. Most of the funds have in fact, as one
would expect, been spent on new buildings to replace old: not
so much bricks into bytes as bricks into concrete and glass. We
do not quibble with this; posts abroad need to operate from suitable
premises and it is self-evident that, where a building is disposed
of, it will in most cases be necessary to acquire another in its
place. As we have previously noted, when the Pound is strong,
there is an incentive to buy rather than to rent.[18]
Some of the new buildings show what can be done. The intelligently
refurbished embassy in Tallinn represents the welcoming, open-door
style of diplomacy; and the new embassy in Berlin is a stunning
example of contemporary architecture which projects an image of
a modern and exciting Britain.

14. The new building in Berlin was the first embassy
to be built under the Private Finance Initiative. It is managed
according to a unitary contract, subject to an innovative 'performance
payment system'.[19]
We suggest that the experience of both the construction and occupancy
phases of this building should be fully appraised to see whether
they offer useful models for other projects of this kind. Such
an appraisal should be made public.

15. Other buildings are less modern. Sir John Kerr
described the Residence of the Consul General in San Francisco
as "slightly old-fashioned"[20]
and wondered aloud whether "its sort of home counties 1920s
atmosphere is exactly right for Silicon Valley."[21]
Those of us who have had the privilege of visiting the Residence
in San Francisco have received a very direct impression of the
excellent value for money which it represents. Significantly,
the Chief Executive of British Trade International, Sir David
Wright, described the Residence as "an integral part of our
operation."[22]

16. It is of course possible that another property
might offer better value for money, but any decision on whether
to relocate the Residence should be taken only after a full assessment
of the costs and benefits, and should not be determined by a judgment
that the present building is "slightly old-fashioned".
The striking and modern edifice in Berlin, which we have already
praised, might impress somewhat less if removed to Silicon Valley,
where the "Great Missenden image"[23]
stands for the traditional quality and dependability of British
business and diplomacy alike. Whilst we strongly endorse continuing
and close scrutiny by the FCO of the cost-effectiveness of its
real estate, we recommend that the Department remain very mindful
that buildings of distinction in key locations can contribute
materially to the effectiveness of British diplomacy in the contemporary
world.

NEW TECHNOLOGY

17. Notwithstanding the expenditure on real estate,
there is also a significant investment under way in new technology.
Sir John told us that the FCO Telecommunications Network (FTN)
project is "the biggest single contract the Foreign Office
have ever signed."[24]
When completed in April 2003, the Network should allow 99 per
cent of FCO staff to communicate directly with each other and
to share information, wherever they are. Sir John described the
introduction of modern information and communications systems
as "the most important thing for us to do, because it improves
the efficiency of everything else we do."[25]

18. The scale of investment in the FTN£165
million over ten years[26]and
the poor track record of information systems procurement in much
of the public sector are such that Parliamentary scrutiny of the
project will be of particular importance. The FCO is already committed
to providing this Committee with six-monthly updates on its IT
and communications strategy.[27]
We recommend that in its regular update reports to our successor
Committee on IT and communications the FCO include a full cost-benefit
analysis of the FTN, the new management information system, and
any other major information technology or communications project.

19. We questioned FCO officials about procurement
of and support for desktop information systems. Mr Matthew Kirk,
Head of the FCO IT Strategy Unit, described the system whereby
stocks of spares are held at most overseas posts and technically
qualified people are available to fix faults which cannot be fixed
remotely or by users.[28]
Mr Kirk told us that "for the sort of faults that you expect
to have fairly commonly on these systems, we ought to be able
to fix them certainly within half a working day."[29]
We recommend that in its Autumn 2001 report on IT and communications
to our successor Committee the FCO include full information on
the steps it is taking to minimise downtime due to faults on desktop
information systems awaiting repair and on the extent to which
it is meeting the half-day target for repairing such faults.

COST-BENEFIT ANALYSES

20. In our 1998-99 Report on FCO Resources, we recommended
the inclusion in each year's FCO Annual Report of a cost-benefit
analysis.[30]
We found nothing in the Annual Report 2001 which purports to provide
such an analysis, so we asked the FCO in writing how we could
discover the information. In reply, the FCO told us that the Report
"sets out costs, and the benefits they buy."[31]
At the start of each chapter of the Report there is a table in
which "the links between costs and benefits are brought out
as clearly as possible." We do not accept that these links
are in fact "brought out as clearly as possible" in
the tables. More to the point, the tables and accompanying text
contain no analysis of costs and benefits, and in tacit
recognition of this the written reply makes no reference to the
term 'analysis'.

21. The FCO has previously undertaken to "include
an analysis of costs and benefits in its Departmental Report",[32]
so we suppose there is no opposition on the part of the FCO to
such an analysis in principle. Sir John suggested that he had
"some conceptual difficulties with putting numerical values
on quite a lot of foreign policy. ... You have to make qualitative
judgments. You have to bring in judgments which cannot be reduced
to a simple cost benefit calculation."[33]
We agree, but we have not asked for a simple, numerical exercise
which does not include qualitative judgments. We accept, as we
have previously accepted,[34]
and as is the case in a range of analyses where environmental
or other unquantifiable benefits have to be assessed, that a cost-benefit
analysis of British foreign policy will contain qualitative and
even subjective judgments. We recommend that the FCO implement
its previous undertaking to include an analysis of costs and benefits
in its Departmental Report. This analysis should include within
its scope the British Council and the BBC World Service.

FCO staff

22. The Diplomatic Service's greatest asset is its
people. At £201,263,000 in 1999-2000 and £195,476,000
in 2000-2001, staff costs account for less than one sixth of the
FCO's total net operating costs.[35]
It is the Diplomatic Service staff who, literally, represent the
United Kingdom abroad. We have previously stated, and the FCO
has accepted, that greater efforts should be made to increase
representation of women and ethnic minorities, especially in the
more senior positions. Women are now better represented in policy
and senior management positions than they were: in 1997 they formed
5.8 per cent and in 2001 they form 8.5 per cent of the total.[36]
In 2000, 57 per cent of those recruited into the fast stream were
women.[37]
Over time, and provided retention rates remain good, promotions
should ensure that approximately half of those in senior positions
are women.

23. The position with regard to ethnic minority staff,
while improving, is less satisfactory. We have been disappointed
on our visits to posts abroad to encounter very few senior staff
from the ethnic minorities. We note with approval that recruitment
into the fast stream is currently healthy, at 7 per cent of the
total.[38]
We hope that percentage will increase further. However, it is
not clear from the information in the Annual Report how big is
the pool of such candidates, and therefore what is their success
rate relative to candidates from other backgrounds. We recommend
that in its response to this Report the FCO set out any information
available to it on the percentage of applications received in
each of the last two years from members of ethnic minority groups,
for recruitment into the various grades.

24. We have also previously expressed our desire
to see in the Service more suitably qualified people from the
private sector.[39]
In doing so, we were echoing the comments of the present Foreign
Secretary who said when in opposition that "As Foreign Secretary,
I will want to find out whether there are people in British industry
with experience and success in exports who might make suitable
ambassadors to some countries with strategic markets."[40]

25. To date, no such people have been found, or at
least none has been appointed at Ambassador level. In written
evidence, the FCO provided a list of senior positions below Head
of Missionmainly in the commercial areawhich have
been filled by people seconded from the private sector, including
NGOs.[41]
When the Permanent Under-Secretary appeared before us, we asked
him why there had been no appointments or secondments at the highest
level. Sir John commented that "the private sector does not
always produce quite as strong a field as I had hoped"[42]
and added that "Testing the market has not revealed many
businessmen ... who are prepared to take what are seen in our
Service as very good jobs, at salaries which the businessmen see
as not very good."[43]

26. Viscount Weir, who as a businessman involved
in international trade has more than 30 years experience of FCO
posts and services, stressed that the quality of those who work
in the posts or provide the services is more important than their
numbers.[44]
While showing some enthusiasm for the secondment to the private
sector of diplomatic staff, he further hinted that greater use
of secondments in the contrary direction might not be entirely
to the benefit of the United Kingdom's diplomatic efforts.[45]
In his view, companies are "very unwilling" to release
their key people.[46]
The corollary of this is that those who are released may be "rejects
and retreads and those who are for some reason not making it to
the top of their company",[47]
and may in any case take a disproportionate amount of what may
be a short secondment to adjust to the Foreign Office culture.
The Permanent Under-Secretary quite rightly places great emphasis
on the professionalism of the Diplomatic Service.[48]

27. In our view, at the most senior levels it is
only the best people who will be good enough and we are certainly
not in favour of secondments from which the FCO (as distinct from
the secondee) derives little benefit. We therefore agree with
the Permanent Under-Secretary that "when bringing in people
from outside one needs to strike a balance". We acknowledge
with approval that "the Diplomatic Service has accepted [the]
need to test the market, involving outsiders"[49]
and we recommend that it continue to pursue open recruitment and
secondment policies wherever outside experience can add to and
not detract from the professionalism of the Service.

28. Although salaries in the Diplomatic Service may
lag behind those in parts of the private sector, we were encouraged
to learn from the Permanent Under-Secretary that "We do not
have retention problems."[50]
The Diplomatic Service Families' Associationfrom whom we
would have welcomed somewhat fuller evidenceflagged up
the issue of "satisfying employment for spouses" as
a matter of concern,[51]
but they provided no evidence of the extent to which this may
be a problem. Mrs Denise Holt, Director of the FCO's Personnel
Command, assured us that "there is no evidence that this
is causing us serious retention problems."[52]

29. This surprised us, because in 1999 the FCO undertook
to "continue to look for ways to improve the situation of
spouses and will keep the Committee informed of progress."[53]
An absence of retention problems is not the same as an improvement.
We are therefore a little sceptical of the assurances given in
oral evidence. We recommend that in its response to this Report
the FCO inform us of progress made in improving the employment
situation of spouses.

LOCALLY-ENGAGED STAFF

30. Not all those who serve this country abroad are
sent from the United Kingdom. In fact, in some posts locally-engaged
staff outnumber home-based staff by more than four to one.[54]
Mark Leonard supported the increasing use of such staff: "One
of the positive things about recent years has been the growth
in the use of locally-engaged staff who ... know the ground very
well. They speak the languages. They have a very good sense of
what the priorities are."[55]
Some of these staff will be United Kingdom nationals, but the
majority are likely to be nationals of the country in which the
post is located and they are all likely to be cheaper to employ
than home-based staff.

31. We commented in 1999 on the balance between home-based
and locally-engaged staff.[56]
We feel the present balance is probably about right, but we are
not convinced that the opportunities offered by use of locally-engaged
staff are being fully utilised. We recommend that the FCO consider
whether there are any more senior roles in which locally-engaged
staff might be used to advantage.

SECURITY OF STAFF OVERSEAS

32. We heard oral evidence from the Permanent Under-Secretary
the day after the inquest into the death of Brigadier Stephen
Saunders in Athens in June 2000 had recorded a verdict of unlawful
killing. That terrible event underscored the vital importance
of ensuring through a process of constant review and the taking
of precautionary measures that the United Kingdom's representatives
abroad are adequately protected from terrorist or criminal attack.
We asked Sir John whether he now has the resources necessary to
fund such protection. Sir John told us that the Treasury had provided
him with the funding he had requested and that "On the best
professional advice, we are spending adequate money."[57]
We entirely accept that such judgments must depend on the best
available advice. We recommend that if the FCO receive professional
advice that the threat to overseas posts or their staff has increased,
the resources necessary to meet that threat should be made available
without delay.

Relations with Parliament

33. We note that the Departmental Report this year
includes, as we requested, appropriate reference to this Committee
and to its Reports.[58]
We were also pleased to be told that preparations for induction
courses for new Members of Parliament are in hand.[59]
On two other aspects of the FCO's relationship with Parliament,
however, we wish to offer more detailed comment.

PARLIAMENTARY QUESTIONS

34. The FCO has previously committed itself to the
target of replying in substance to all Parliamentary Questions
tabled for answer on a named day on the day named, or within one
week where the information requested is not readily available.[60]
Sir John told us that the latest figures show that 8 out of ten
such Questions are answered on the day named, and that 93 per
cent are answered within one week of the day named.[61]
The figure for answers given on the day named represents a regrettable
worsening of performance, down from 85 per cent in 1999-2000.[62]
There is nothing to suggest that the week's period of grace, which
it is intended should apply only in cases where information is
genuinely unavailable in time, is being used as an excuse for
not answering on the day named.

CORRESPONDENCE WITH MEMBERS OF PARLIAMENT

35. There has been a more serious problem with replies
to Members' correspondence, much of which relates to entry clearance
cases. As is stated in the Annual Report, "2000 was a demanding
year for JECU's[63]
Correspondence Unit ... the average rate of response within the
15-day target for MPs' letters was only 50%, against the target
of 90%."[64]
The FCO itself knew this was not good enough and it appears that
the actions it has taken following criticism by this Committee
and others have achieved results.

36. According to Mr David Reddaway, Director of Public
Services, "since the turn of the year we have acted on the
advice the Committee gave, and we have over 91 per cent response
rate on time, and I think that 75 per cent of the letters which
we did not deal with within the precise limit were answered within
three days of that, so the performance is really significantly
better."[65]
We congratulate the JECU Correspondence Unit on its success in
meeting its target and wish it well in its efforts to sustain
its performance.

Some thoughts on the nature of modern diplomacy

37. Part of our purpose in inviting independent witnesses
from outside FCO circles to give oral evidence was to discover
the extent to which today's diplomacy is able to implement the
FCO's mission statement "to promote the interests of the
United Kingdom and to contribute to a strong world community."[66]

38. Mark Leonard, Director of the Foreign Policy
Centre, has developed a theory of "public diplomacy",
by which is meant a more direct interaction between a country's
foreign service and other countries' (or regional, global, etc.)
populations and non-governmental organisations. Mr Leonard suggests
that "Traditional diplomacy is as important as it has ever
been [but it] should be supplemented with a whole new tier of
diplomacy."[67]
As part of this new tier, Mr Leonard advocates greater reliance
on new technology, with "regional hubs" servicing "virtual
embassies" using the internet to communicate more directly
with people and with NGOs.[68]

39. We put some of Mr Leonard's points to Sir John,
who responded that they represented "a very elegant re-invention
of the wheel. Embassies have always had such a role. While they
exist to talk privately to governments, they also exist to talk
to people and populations at large."[69]
We are not altogether convinced by this. New developments in information
systems offer opportunities for engaging in a style of diplomacy
which has not previously existed. An embassy always had to have
its ear to the ground to anticipate changes which might affect
United Kingdom interests, but it appears that the FCO is now moving
towards exploiting the opportunities for diplomacy opened up by
new technology and towards broadening the skills base of its staff,
as Mr Leonard acknowledged.[70]
This process will need to continue if the effectiveness of the
United Kingdom's diplomacy is to be maintained or improved.

40. Widening the issue from diplomacy somewhat, we
also explored with Sir John the shift in the British Council's
priorities away from a physical presence in some areas where it
has traditionally or even recently been particularly activesuch
as Western Europe and South Americaand towards a "hub
and spoke"[71]
model which makes greater use of new technology to provide its
services on-line. Our successor Committee will be in a position
to judge whether Sir John's assertion that "the British Council
have made some difficult decisions quite correctly"[72]
is correct.

41. Our second witness, Viscount Weir, appeared to
be generally satisfied with the FCO. He had high praise for the
calibre of the Diplomatic Service and for the advice he and his
business colleagues had received.[73]
Apart from suggesting greater coverage of the former CIS countries
and Latin America, where he felt trading opportunities were not
being exploited to the extent he would wish to see, Lord Weir
had no changes of substance to propose in the way the FCO represents
the United Kingdom abroad.

42. On the other hand, Professor Simon Reich, Director
of Research at the Royal Institute of International Affairs, challenged
some of the underlying assumptions about British foreign policy.
Many of his most interesting comments, for example about the 'special
relationship' between the United Kingdom and the United States,
are beyond the scope of this inquiry. However, Professor Reich
also commented on the FCO's organisation and priorities.

43. The Professor's thesis of "globalisation"to
which Mr Leonard also subscribesis that modern diplomacy
should be organised on a functional rather than on a geographic
basis.[74]
He pointed to themes which can be traced across the world, where
similar forces and influences produce comparable outcomes. When
invited to describe how the United Kingdom's diplomacy should
be changed to deal with these global issues, Professor Reich proposed
a shift in emphasis from promoting British values (the British
Council) to promoting British trade (British Trade International);
and a refocusing of resources from bilateral to multilateral efforts.[75]

44. We discussed globalisation with the Permanent
Under-Secretary, who said that "long-term we are moving away
from a Foreign Office which was basically a geographical structure
to one which pays more and more attention to thematic issues and
cross-cutting issues."[76]
It is only in the long-term that the results of this process can
be judged, but it is at least encouraging that issues such as
globalisation are apparently being addressed. However, we would
not support robbing the British Council to pay British Trade International:
each should be funded to the appropriate level, on its merits.

45. Having dipped our toes in the waters of the debate
about the future direction of diplomacy, we recognise that there
are important issues to be discussed and resolved within and outside
the Foreign and Commonwealth Office. Parliament will wish to be
part of that debate, but this necessarily brief Report is not
the place to engage substantively in it. Nonetheless, our initial
impression is that the FCO is well aware of the issues and is
in many cases already moving in the direction advocated by reformers
without diluting its traditional strengths and values.

Conclusion

46. It is fitting that our final Report of this Parliament
should look at the work of the Foreign and Commonwealth Office
in the round. We are thus presented with an opportunity to place
on record our appreciation of the support we as a Committee and
as Members of Parliament have received from posts abroad and of
the quality of evidence supplied by the FCO in London.

47. As well as having its primary security role,
the FCO is charged with the task of promoting trade abroad to
boost prosperity at home; protecting the quality of life; and
furthering human rights and democracy. In striving to meet all
its goals, the FCO's long-term judgments and its short-term decisions
alike have to be right. If it is to make the right judgments and
take the right decisions, the FCO must be adequately resourced.
In particular, it must continue to be served by staff of the highest
intellectual calibre, who can bring to their roles breadth of
experience and soundness of judgment.

48. The primary objective of the FCO is to "ensure
the security of the United Kingdom and the Dependent Territories
and peace for our people by promoting international stability,
fostering our defence alliances and actively promoting arms control."[77]
As Sir John Kerr told us: "If we fail on that priority, it
does not really matter about the rest."[78]
Diplomacy is a key resource in meeting that objective in a world
where threats have been multiplying, are increasingly complex,
and are more difficult to predict or to pre-empt. The work of
the Foreign and Commonwealth Office is thus becoming more important,
and is likely to become more important still. Parliament generally,
and the Foreign Affairs Committee in particular, will have a major
role in exercising vigilant and critical oversight over the FCO's
efforts to achieve its stated objectives in a turbulent and ever-changing
world.

SUMMARY OF CONCLUSIONS AND RECOMMENDATIONS

(a) We recommend that
greater thought be given when preparing the FCO Departmental Report
2002 to making the index more comprehensive and more relevant
to the types of queries which readers are likely to have, and
that the title of each appendix is reproduced on the contents
page (paragraph 5).

(b) We recommend that
a list of those 19 of the 60 Measures for Change which, on the
FCO's own reckoning, have yet to be completed be retained in next
year's Annual Report (paragraph 6).

(c) We recommend that
in future editions of its Annual Report the FCO include a description
of how its organisational structure functions, how the various
components relate to each other, and of the responsibilities of
each member of the Board of Management (paragraph 7).

(d) We recommend that
the FCO review how it presents financial information in its Annual
Report, with a view to making that information more accessible,
more detailed and more relevant to the concerns of those who are
likely to use the Report (paragraph 8).

(e) Whilst we strongly
endorse continuing and close scrutiny by the FCO of the cost-effectiveness
of its real estate, we recommend that the Department remain very
mindful that buildings of distinction in key locations can contribute
materially to the effectiveness of British diplomacy in the contemporary
world (paragraph 16).

(f) We recommend that
in its regular update reports to our successor Committee on IT
and communications the FCO include a full cost-benefit analysis
of the FTN, the new management information system, and any other
major information technology or communications project (paragraph
18).

(g) We recommend that
in its Autumn 2001 report on IT and communications to our successor
Committee the FCO include full information on the steps it is
taking to minimise downtime due to faults on desktop information
systems awaiting repair and on the extent to which it is meeting
the half-day target for repairing such faults (paragraph 19).

(h) We recommend that
the FCO implement its previous undertaking to include an analysis
of costs and benefits in its Departmental Report. This analysis
should include within its scope the British Council and the BBC
World Service (paragraph 21).

(i) We recommend that
in its response to this Report the FCO set out any information
available to it on the percentage of applications received in
each of the last two years from members of ethnic minority groups,
for recruitment into the various grades (paragraph 23).

(j) We acknowledge
with approval that "the Diplomatic Service has accepted [the]
need to test the market, involving outsiders" and we recommend
that it continue to pursue open recruitment and secondment policies
wherever outside experience can add to and not detract from the
professionalism of the Service (paragraph 27).

(k) We recommend that
in its response to this Report the FCO inform us of progress made
in improving the employment situation of spouses (paragraph 29).

(l) We recommend that
the FCO consider whether there are any more senior roles in which
locally-engaged staff might be used to advantage (paragraph 31).

(m) We recommend that
if the FCO receive professional advice that the threat to overseas
posts or their staff has increased, the resources necessary to
meet that threat should be made available without delay (paragraph
32).

(n) The primary objective
of the FCO is to "ensure the security of the United Kingdom
and the Dependent Territories and peace for our people by promoting
international stability, fostering our defence alliances and actively
promoting arms control." As Sir John Kerr told us: "If
we fail on that priority, it does not really matter about the
rest." Diplomacy is a key resource in meeting that objective
in a world where threats have been multiplying, are increasingly
complex, and are more difficult to predict or to pre-empt. The
work of the Foreign and Commonwealth Office is thus becoming more
important, and is likely to become more important still. Parliament
generally, and the Foreign Affairs Committee in particular, will
have a major role in exercising vigilant and critical oversight
over the FCO's efforts to achieve its stated objectives in a turbulent
and ever-changing world (paragraph 48).